Inventory Planning Blog

NetSuite Demand Planning module does provide for very basic planning for smaller inventories. It may be a good starting point but as a business grows and becomes more complex so too does the inventory. VALOGIX® Inventory Planner seamlessly integrates to NetSuite, providing powerful yet simplified inventory planning. It is a complimentary solution to NetSuite and enhances your productivity and ability to service your customers.

Valogix gives you instant visibility all locations and optimization provides exceptional value by reducing inventory safely, controlling new purchases and improving customer service. Inventory planning solutions that forecast, plan and optimize an inventory are found in widespread acceptance in large enterprise companies but these solutions can cost between hundreds of thousands to millions of dollars, take months to implement and are generally not affordable or usable by SMBs.

Using Valogix Inventory Planner helps eliminate manual work and guesswork to determine forecasts, replenishment plans, stocking levels and reorder points. Because the system handles these tasks automatically, you keep current as business conditions change. Alerts warn you of potential problems before they happen, giving you time to proactively resolve an issue before it becomes a customer service problem.

Because excess and obsolete inventory items are identified, you can maintain your inventory at an optimum level for your current business conditions. Optimization re-balances your inventory mix, which further reduces costs while increasing insight and control of your inventory. You get an added benefit of improving your positive cash flow quickly and with less time!

If you are considering just adding custom reports and spreadsheets along with NetSuite, consider the following:

Assume you use an outside IT (or Reseller) firm to build the custom reports. Assume it costs $5,000 to develop. Let us also assume it is refreshed, updated, each day. Now what? This is static data and yes it is current but it just sits there and provides no efficiency for the planner. The planner must review and decide what the data suggests and what to do with the data.

However, the real cost is much higher than the cost to develop the report. Every report, like spreadsheets must be maintained. Much like a car, the purchase price is just the beginning. Hours of a planner’s time are spent pouring over the results to make decisions. You need to count those hours as an associated cost. So, if a planner is paid say $45,000 per year, plus taxes and benefits the total annual cost is over $50,000. If 35% of a planner’s time is spent reviewing just the reports to manage the inventory, then the first year cost is $5,000 + $17,500 = $22,500. That is some expensive report. Are you getting your money’s worth? You still may not be done.

Now, a planner has consumed another up to 60% of their available time working with the spreadsheets. At 60%, the cost on an annual basis using the compensation listed above is 60% x $50,000 = $30,000.

The total cost of ownership for the $5,000 report is now a whopping $52,500.

Not included in the number is the cost of:

Lost sales due to out of stocks

Carrying costs for excess inventory

Expedited shipping costs both inbound and outbound

Loss of customers because they are dissatisfied

From a Valogix Customer:

“With Valogix and NetSuite, we have a much more accurate picture of what our inventory needs are going to be at any given time than we had in the past,” LeBrun said. “Valogix knows what inventory we have on hand, what’s on order and accurately recommends the next replenishment.”.

Make is easier to plan your inventory automatically with a solution that automatically tracks the changes in demand. Valogix Inventory Planner will free up your resources (including cash), reduce losses from obsolescence, and increase service levels. The tools you need to forecast, plan, and optimize inventory, manage your business more efficiently and meet the demands of customers and suppliers are powerful, affordable, and proven.